Formosa Plastics Group (台塑集團), the country's biggest diversified industrial company, expects second-quarter earnings to rise from the previous three months, boosted by higher product prices.
Chemical prices gained after accidents at some plants in Asia reduced supply, Formosa Plastics Group chief executive William Wong (王文淵) told reporters in Taipei yesterday after unit Formosa Chemicals & Fibre Corp’s annual shareholders meeting.
First-quarter earnings for Formosa Plastics Group, which controls Formosa Petrochemical Corp (台塑石化), the country’s only publicly traded oil refiner, were hurt by higher crude-oil costs.
Formosa Petrochemical raised gasoline and diesel prices on May 29 to make it more profitable to turn crude oil into fuels.
“The second quarter is a bit better than the first,” Wong said. “There were quite a lot of abnormal conditions for our competitors recently.”
State-run CPC Corp, Taiwan (CPC, 台灣中油), Formosa Petrochemical’s bigger domestic rival, said on Tuesday it had temporarily cut the supply of chemicals to customers because of a decline in usable industrial water, which is needed as a cooling agent.
Lower-than-usual rainfall has increased the salinity of CPC’s water supply, rendering it unsuitable for use at two plants.
Meanwhile, Sinopec Maoming Petrochemical Corp (中國石化茂名煉油化工), China’s second-biggest refinery, shut two ethylene units on Tuesday because of a fire. Ethylene is a raw material for making plastics and fibers.
Formosa Chemicals posted a 36 percent decline in its first-quarter profit from a year earlier to NT$5.19 billion (US$172 million), while operating costs surged 64 percent, it said in a statement filed to the Taiwan Stock Exchange on April 29.
The company uses aromatics, produced from petroleum, to make chemicals for the manufacture of computer casings, toys and automobile parts. Crude oil in New York has increased more than 90 percent over the year.
Formosa Petrochemical’s net income fell 21 percent to NT$9.82 billion in the three months ended March 31 from a year earlier, the Mailiao-based company said on April 29.
Formosa Chemicals rose 0.7 percent to close at NT$74.50 in Taipei trading before Wong’s comments, while Formosa Petrochemical advanced 1.3 percent to NT$91. The TAIEX climbed 0.08 percent.
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